Startup Cash Runway & Burn Rate Calculator
Runway is your cash balance divided by net monthly burn, the gap between expenses and revenue. Enter cash, monthly expenses, revenue, and expense growth to see how many months the money lasts.
Runway & Burn Rate
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How the Runway & Burn Rate Works
Gross burn is total monthly spend; net burn is spend minus revenue. Runway is the number of months until cash hits zero at the current net burn, and this calculator models expense growth so the result is more realistic than a flat division. In the example, cash of $200,000 against a $30,000 net burn starts near 6.7 months, but 2% monthly expense growth shortens it to 7 full months before the balance goes negative. That difference matters when you plan a raise. As a rule, 12 or more months of runway gives a comfortable raise window; under 6 months is critical, and you should cut costs or start fundraising immediately. Extending runway without fundraising usually means trimming recurring software, renegotiating contracts, or timing hires later. Investors also look at burn multiple, which compares net burn to net new ARR; below 1 is efficient. Watch both runway and burn multiple together, not runway alone. The burn multiple, the ratio of net burn to net new ARR, tells you whether each dollar spent is buying durable growth.
Formula Used
Net Burn = Monthly Expenses - Revenue; Runway (months) = Cash / Net Burn, projected month by month with growth
Cash $200,000, monthly expenses $40,000, revenue $10,000, expense growth 2%. Net burn starts at $30,000 and runway runs out at 7 months.
When to Use This Calculator
- Deciding when to start a fundraise.
- Setting a hiring plan against available cash.
- Modeling the impact of cutting or adding recurring costs.
Common Mistakes
- Using gross burn instead of net burn: Subtracting revenue gives the true monthly cash drain and a longer, more accurate runway.
- Assuming expenses stay flat: Salaries and tools grow with hiring; modeling even 2% monthly growth materially shortens runway.
- Ignoring one-time costs: Annual insurance, audits, and equipment purchases belong in the projection or they will surprise you.
Frequently Asked Questions
What is the difference between gross burn and net burn?
Gross burn is everything you spend in a month, regardless of income. Net burn subtracts monthly revenue, so it shows the amount of cash you actually lose. Runway should always be calculated from net burn when the business has any revenue.
How do you calculate how many months of cash runway remain?
Divide current cash by net monthly burn for a quick estimate. For accuracy, project forward month by month and grow expenses if they trend up. Include irregular costs such as annual software and insurance in the month they are paid.
What is considered a safe runway buffer for startups?
Twelve months or more gives you time to raise without pressure and to recover if growth stalls. Six to 12 months is workable but tight. Under six months, cut discretionary spending and start fundraising immediately, because raises take longer than founders expect.
What is the difference between gross burn and net burn rate?
Gross burn is total monthly spending regardless of income. Net burn subtracts revenue, showing the actual cash lost each month. Runway should be based on net burn whenever the business has revenue, since that is what drains the bank account.
How do you extend startup cash runway without fundraising?
Trim recurring software, renegotiate contracts, delay non-critical hiring, and collect receivables faster. Pushing out one large expense can add a full month of runway. Combine several small cuts to buy meaningful time before a raise.
How This Page Is Reviewed
Written by the Recapflow Editorial Team and last reviewed . Every formula and worked example is cross-checked against the live calculator engine and a hand-worked example. This page is educational and does not replace professional financial, tax, or legal advice.